The UK economy deteriorates by the Brexit | Peru Trade – Trade

(AFP) -The British economy is experiencing a “dramatic” decline, with the largest drop of private activity since the global financial crisis, following the decision of the UK to leave the European Union, reveals a study Friday very expected.

the financial services company Markit published on Friday its composite managers PMI purchases for the month of July, falling to its lowest level since April 2009 index.

the composite index was established in July at 47.7 points in retreat from 52.4 points the previous month. More than 50 points PMI index means that the activity progresses, while a lower figure represents a retreat.

“The month of July was marked by a dramatic deterioration in the economy, with business activity falling at its fastest pace since the peak of the global financial crisis in early 2009, “said Chris Williamson, chief economist at Markit.

” the change in trend, manifested by cancellations of orders, the absence of new orders or postponement or cancellation of projects, is generally attributed in one way or another to Brexit “he said.

the PMI, very important to the British economy index for the service sector, was established specifically 47.4 points in July from 52.3 points in June, its lowest level in more than seven years ago.

the data, which was collected between 12 and July 21, are still provisional and Markit publish the definitive rates in early August.

These benchmarks were expected because they provide precise state of the British economy a first image after the referendum June 23 that gave victory to supporters Britain to leave the EU.

to see the effects of Brexit in official statistics, will have to wait several weeks or even months.

– Recession in sight? –

“The sinking of the PMI composite to its lowest level since 2009 provides the first evidence that Britain is entering a period of sharp slowdown,” said Samuel Tombs, an economist at Pantheon Macroeconomics

economists are now wondering whether the country can escape a recession, which is characterized by two consecutive quarters of contraction in gross domestic product (GDP).

growth forecasts have been revised sharply lower for UK. The International Monetary Fund (IMF) has cut the global growth forecast by 0.9 points, to 1.3% for next year.

“The future effects of Brexit are exceptionally uncertain,” estimated Tuesday IMF chief economist, Maurice Obstfeld.

the new British prime minister Theresa May said he did not notify the willingness to leave the EU in 2016, while the government determines the type of relationship you want to establish with its 27 European partners. Meanwhile, households and British companies choose mostly by prudence.

The only positive point lies in improving exports of industrial products due to the fall of the pound against other currencies, relatively cheaper British goods abroad.

it also appears increasingly likely that the Bank of England go to the rescue of the British economy with new stimulus measures in August, having chosen to maintain the “status quo” in June.

Meanwhile, the new British Finance Minister, Philip Hammond, said at the start of a trip to China, which could take further steps the next fall.

“in the medium term we will have the occasion, with our speech autumn (…) to rethink budgetary policy if deemed necessary, based on the statistics that appear next few months” Hammond said, quoted by public broadcaster BBC.